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Chapter 4: Q1PS (page 243)

Refer to the Practice Set data provided in Chapters 2 and 3 for Crystal Clear Cleaning.

Requirements

1. Prepare a worksheet (optional) at November 30, 2018. Use the unadjusted trial balance from Chapter 2 and the adjusting entries from Chapter 3.

2. Prepare an income statement and statement of retained earnings for the month ended November 30, 2018. Also prepare a classified balance sheet at November 30, 2018, using the report format. Assume the Notes Payable is long-term. Use the worksheet prepared in Requirement 1 or the adjusted trial balance from Chapter 3.

3. Prepare closing entries at November 30, 2018, and post to the accounts. Open T-accounts for Income Summary and Retained earnings. Determine the ending balance in each account. Denote each closing amount as Clos. and each account balance as Balance.

4. Prepare a post-closing trial balance at November 30, 2018.

Short Answer

Expert verified

Post-Closing Trial Balance: $72,900

Step by step solution

01

Worksheet

Crystal Clear Company

Worksheet

November 30, 2018

Account Names

Unadjusted Trial Balance

Adjustments

Adjusted Trial Balance

Debit

Credit

Debit

Credit

Debit

Credit

Cash

$ 51,650

$ 51,650

Accounts Receivables

4,000

4,000

Cleaning Supplies

320

$ 270

50

Prepaid Rent

4,000

4,000

Prepaid Insurance

4,800

4,800

Equipment

5,400

5,400

Truck

3,000

3,000

Accounts Payable

$ 1,245

$ 1,245

Unearned Revenue

15,000

15,000

Notes Payable

36,000

36,000

Common Stock

18,000

18,000

Dividends

1,400

1,400

Service Revenue

5,100

5,100

Salaries Expense

400

400

Advertising Expense

200

200

Utilities Expense

175

175

Supplies Expense

$ 270

270

Depreciation Expense

150

150

Accumulated Depreciation

150

150

Interest Expense

59

59

Accrued Interest

59

59

Total

$ 75,345

$ 75,345

$ 479

$ 479

$ 75,554

$ 75,554

02

Income statement, statement of retained earnings and balance sheet

Income Statement

Canyon Canoe Company

Amount

Particular

Service Revenue

5,100

Salaries Expense

400

Advertising Expense

200

Utilities Expense

175

Supplies Expense

270

Depreciation Expense

150

Interest Expense

59

Total Expenses

1,254

Net Income

$ 3,846

Retained Earnings Statement

Particular

Amount

Beginning Balance

0

Add: Net Income

$ 3,846

Less: Dividends

1,400

Ending Balance

$ 2,446

Balance Sheet

December 31, 2018

Assets

Amount

Current Assets

Cash

$ 51,650

Accounts Receivables

4,000

Cleaning Supplies

50

Prepaid Rent

4,000

Prepaid Insurance

4,800

Total Current Assets

$ 64,500

Non-current Assets

Equipment

5,400

Truck

3,000

Less: Accumulated Depreciation

150

8,250

Total Non-Current Assets

$ 8,250

Total Assets

$ 72,750

Liabilities and Shareholder’s equity

Current Liability

Accounts Payable

1,245

Unearned Revenue

15,000

Accrued Interest

59

Total Current Liability

$ 16,304

Non-Current Liability

Notes Payable

36,000

Total Non-Current Liability

36,000

Total Liability

52,304

Shareholders’ Equity

Wilson, Capital

$ 18,000

Add: Retained Earnings

2,446

Total Shareholders’ Equity

$ 20,446

Total Liabilities and Shareholders’ Equity

$ 72,750

03

Adjusting entries and posting into ledger

Date

Particular

Debit

Credit

2018

Dec 31

Total Revenue

$ 5,100

Income Summary

$ 5,100

Being revenue account closed

Dec 31

Income Summary

1,254

Salaries Expense

400

Advertising Expense

200

Utilities Expense

175

Supplies Expense

270

Depreciation Expense

150

Interest Expense

59

Being all expenses closed to the income summary

Dec 31

Income Summary

3,846

Retained Earnings

3,846

Being net income closed to retained earnings

Income Summary

Clos. 2

$ 1,254

$ 5,100

Clos. 1

Clos. 3

3,846

3,846

Clos.

0

Retained Earnings

0

Adj. Bal.

Clos. 4

1,400

$ 3,846

Clos. 3

2,446

Bal.

04

Post closing trial balance

Crystal Clear Cleaning

Post Closing Trial Balance

November 30, 2018

Balance

Account Title

Debit

Credit

Cash

$ 51,650

Accounts Receivables

4,000

Cleaning Supplies

50

Prepaid Rent

4,000

Prepaid Insurance

4,800

Equipment

5,400

Truck

3,000

Accumulated Depreciation

$ 150

Accounts Payable

1,245

Unearned Revenue

15,000

Notes Payable

36,000

Common Stock

18,000

Accrued Interest

59

Retained Earnings

2,446

Total

$ 72,900

$ 72,900

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Most popular questions from this chapter

The unadjusted trial balance of Fleming Investment Advisers at December 31, 2018, follows: Adjustment data at December 31, 2018: a. Unearned Revenue earned during the year, \(700. b. Office Supplies on hand, \)3,000. c. Depreciation for the year, \(3,000. d. Accrued Salaries Expense, \)4,500. e. Accrued Service Revenue, \(9,000. Account Title Office Supplies Cash Debit Credit Accounts Receivable Equipment Accumulated Depreciation—Equipment Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Common Stock Dividends Service Revenue Insurance Expense Salaries Expense Supplies Expense Interest Expense Rent Expense Depreciation Expense—Equipment Total Balance \) 25,000 \( 183,000 \) 183,000 26,000 4,500 15,000 Retained Earnings 5,500 28,000 99,000 51,000 7,500 26,000 $ 19,000 14,000 2,500 33,000 3,000 7,000 FLEMING INVESTMENT ADVISERS Unadjusted Trial Balance December 31, 2018 Requirements 1. Prepare a worksheet for Fleming Investment Advisers at December 31, 2018. 2. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in account format. 3. Prepare closing entries.

For each account listed, identify whether the account would appear on the post-closing trial balance. Indicate either yes or no.

18. Cash

What are temporary accounts? Are temporary accounts closed in the closing process?

Houston Veterinary Hospital completed the following worksheet as of December 31, 2018.


Requirements

1. Complete the worksheet for Houston Veterinary Hospital.

2. Prepare the closing entries.

3. Prepare a post-closing trial balance.

Dalton Hair Stylists’s adjusted trial balance follows. Prepare Dalton’s income statement for the year ended December 31, 2018. DALTON HAIR STYLISTS Adjusted Trial Balance December 31, 2018 Account Title Office Supplies Cash Debit Credit Accounts Receivable Equipment Accumulated Depreciation—Equipment Accounts Payable Interest Payable Notes Payable Common Stock Dividends Service Revenue Rent Expense Supplies Expense Depreciation Expense—Equipment Interest Expense Balance \( 1,300 \) 36,150 \( 36,150 400 \) 2,200 3,100 500 1,400 16,150 13,800 3,900 850 2,200 2,300 1,500 1,800 20,900 Total.
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